Inside Job Transcript - Final Version - 9.30.10 - Sony Pictures Classics
Inside Job Transcript - Final Version - 9.30.10 - Sony Pictures Classics
Inside Job Transcript - Final Version - 9.30.10 - Sony Pictures Classics
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
<strong>Inside</strong> <strong>Job</strong> transcript – <strong>Sony</strong> <strong>Pictures</strong> – September 2010 28<br />
01:35:33.17<br />
NARRATOR: During the bubble, the investment banks were borrowing heavily, to buy<br />
more loans, and create more CDOs.<br />
The ratio between borrowed money and the banks' own money was called leverage.<br />
The more the banks borrowed, the higher their leverage.<br />
In 2004, Henry Paulson, the CEO of Goldman Sachs, helped lobby the Securities and<br />
Exchange Commission to relax limits on leverage, allowing the banks to sharply<br />
increase their borrowing.<br />
01:36:05.14<br />
{KENNETH ROGOFF<br />
PROFESSOR OF ECONOMICS, HARVARD}<br />
KENNETH ROGOFF: The SEC somehow decided to let investment banks gamble a lot<br />
more. That was nuts. I don't know why they did that, but they did that.<br />
01:36:21.20<br />
{ON APRIL 28, 2004, THE SEC MET TO CONSIDER<br />
LIFTING LEVERAGE LIMITS ON THE INVESTMENT BANKS}<br />
COMMISSIONER HARVEY J. GOLDSCHMID: We've said these are the big guys and<br />
clearly that's true. But that means if anything goes wrong, it's going to be an awfully big<br />
mess.<br />
[LAUGHTER]<br />
DIRECTOR ANNETTE L. NAZARETH: At these levels, you obviously are dealing with<br />
the most highly sophisticated financial institutions.<br />
01:36:37.13<br />
COMMISSIONER ROEL C. CAMPOS: These are the firms that do most of the<br />
derivative activity in the United States. We talked to some of them as to what their<br />
comfort level was.<br />
DIRECTOR ANNETTE L. NAZARETH: The firms actually thought that the number was,<br />
uh, appropriate.<br />
CHAIRMAN WILLIAM DONALDSON: Do the commissioners vote to adopt the rule<br />
amendments and new rules as recommended by the staff?